Estimating output gaps in Asia: A cross-country study

We estimate output gaps for Hong Kong, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, and Taiwan, using the Hodrick-Prescott (HP) filter, a band-pass (BP) filter, the Beveridge-Nelson (BN) filter and unobservable-components (UC) techniques. Three conclusions are notable. First, the gaps resulting from the BN filter, which is "one-sided," differ from the other filters that are "two-sided." Second, the UC approach has the advantage that it allows confidence bands for the gap to be constructed and that it yields estimates of the growth rate of potential. Third, the HP, UC, and BP gaps are similar. (C) 2003 Elsevier Inc. All rights reserved.